Royalty Pharma Drops Judicial Review Request of Elan Bid

By Makiko Kitamura -
Jun 18, 2013

Royalty Pharma withdrew its request
for a judicial review of an Irish Takeover Panel decision
requiring the company to end its $6.7 billion bid for Elan
Corp. (ELN), which has begun a formal sale auction process.

Elan shareholders approved a share-repurchase plan
yesterday, a vote that meant Royalty Pharma had to allow its
unsolicited takeover offer for the drugmaker to lapse, according
to the panel’s ruling. A court hearing was scheduled for
tomorrow in Dublin to consider the regulator’s decision.

“In light of recent developments, we are no longer
pursuing the judicial review we had requested,” Royalty Pharma
Chief Executive Officer Pablo Legorreta said today in a
statement.

The withdrawal may not end the pursuit of Dublin-based Elan
that Royal Pharma began in February. Elan said last week it will
invite the suitor to participate in a formal sale process with
other potential buyers. Royalty Pharma, which also has
headquarters in Dublin, had no comment yet on whether it will
participate in the auction, said Andrea Coleman, a spokeswoman.

Elan rose as much as 1.9 percent to 10.28 euros and was
trading up 0.7 percent at 1:36 p.m. in Dublin. The stock has
gained 30 percent this year.

Bid Increased

Since an indicative offer of $11 for each American
depositary receipt on Feb. 25, Royalty has raised its formal bid
twice to $13 per ADR, plus $2.50 if certain sales and
development goals are met. Elan’s board has rejected all
proposals by Royalty Pharma. The ADRs fell 1.2 percent to $13.49
at the close in New York yesterday.

Acquiring Elan would give Royalty Pharma access to
royalties for Tysabri, an intravenous infusion developed by Elan
for multiple sclerosis. Biogen Idec Inc. (BIIB) of Weston,
Massachusetts, agreed to buy Elan’s stake in the drug for $3.25
billion in cash plus future royalties on Feb. 6.

Legorreta pioneered the drug-royalty business in 1996 with
the founding of Royalty Pharma, which now has $1.4 billion in
revenue and a 96 percent profit margin, according to company
documents. Its assets include 38 approved and marketed
pharmaceutical products, mostly market-leading drugs for
critical care and life-threatening diseases.